Major Depressive Disorder (MDD) is one of the most prevalent psychiatric disorders. A number of psychosocial and pharmacological treatments have been developed which have proven to be efficacious for major depression. In general, different forms of psychotherapy for depression have been found efficacious. One of the most widely used forms of psychotherapy, dynamic therapy, however, has received very little research attention. For example, no study has yet compared the efficacy of dynamic therapy to serotonin selective reuptake inhibitor (SSRI) or to a placebo control condition among depressed patients. The primary aim of this proposal is to conduct a randomized clinical trial to examine the efficacy of a widely used form of manualized dynamic psychotherapy (supportive expressive psychodynamic therapy or SE) relative to an antidepressant medication condition (SSRI-Sertraline) replaced if clinically indicated by a serotonin-norepinephrine reuptake inhibitor (SNRI-venlafaxine) + Clinical Management (CM) and pill placebo + CM for patients with MDD. The secondary aims are: (a) to test whether SSRI/SNRI + CM is more effective than SE therapy among the more severely depressed outpatients in the sample; (b) to gather preliminary data on the relapse/recurrence rate of depression for patients who received SE versus SSRI/SNRI + CM; and (c) to examine predictors of outcome and mediators of change in these treatments. Steps toward effectiveness research have been taken by minimizing exclusion criteria, including a flexible medication switching condition, examining a wide range of outcome and functioning variables and assessing health care usage.